This article is a sponsored feature from Mining.com.au partner Alto Metals Limited. It is not financial advice. Talk to a registered financial expert before making investment decisions.
Australia has long been established as a world-leader of gold production and is currently the second largest producer globally.
Western Australia in particular is a well-documented production hotspot dating back to the 1890s. Of the 40-plus major gold projects currently in the pipeline out to 2026 in Australia, 29 are domiciled on the west coast, cementing the state’s status as a literal gold mine of investment opportunities.
Data from the Australian Government Department of Industry, Science and Resources (DISER) shows that global mined gold production was estimated to total 3,570 tonnes in 2021, rising from 2,646 tonnes per annum (+35%) since 2001. It was also up from 2,877 tonnes per annum (+24%) over the decade from 2011.
However, that annual mine production has been below the global demand for gold in all years over the past two decades apart from 2003.
It is amid this backdrop that Alto Metals (ASX:AME) is continuing with its exploration strategy, which is focused on discoveries and resource growth within the Alpha Domain within the Sandstone Gold Project located in the East Murchison mineral field of Western Australia.
Managing Director and CEO Matthew Bowles tells Mining.com.au in particular, Alto is focusing on rapidly growing its shallow, open-pitable gold resources to support any prospect that one day Sandstone could become a mine.
“It is an exciting time for us as a company and for our shareholders, as we continue to build on the significant progress we have made over the past 12 months.
“The company is focused on adding further ounces and sees plenty of avenues to continue growing the Sandstone resource with numerous priority targets”
Drilling is again underway at Indomitable following up strike extensions to the north of known mineralisation along with interpreted high-grade depth extensions. The company is focused on adding further ounces and sees plenty of avenues to continue growing the Sandstone resource with numerous priority targets, as well as starting to target the significant potential at depth, which remains relatively untested.
The total mineral resource now delineated at Sandstone is a significant milestone for the company.”
Stand-alone gold operation
A recent mineral resource update has significantly increased the total mineral resources at the Sandstone Gold Project and was achieved at an average discovery cost of $16 an ounce.
As Bowles explains, the latest update provides strong encouragement that Alto will be able to continue growing its resource inventory and progress its strategy to develop a stand-alone gold operation.
He says Alto is focused on adding further ounces and sees plenty of avenues to continue growing the Sandstone resource with numerous priority targets, as well as starting to target the significant potential at depth, which remains relatively untested.
The CEO notes there is significant potential for both shallow and deeper high-grade resource expansion remains, with the company’s exploration strategy continuing to focus on the Alpha Domain as a priority. Importantly, he says when considering the exploration potential of Sandstone, more than 70% of the current mineral resources are less than 100m from surface and 90% are defined within the top 150m from surface.
“This latest update once again highlights the shallow nature of mineralisation…”
“This latest update once again highlights the shallow nature of mineralisation and has delivered a robust, optimised and pit-constrained resource of 832,000oz gold at 1.5g/t, representing 80% of the total MRE and remains open in all directions. Our systematic approach to exploration is continuing to deliver and we are confident further drilling will continue to grow the resource and increase the confidence of additional Inferred resources to indicated.”
The vast majority of the more than 740km-square project area is virtually untested below 100m. Drilling is continuing at site, with the first phase of 5,000m focused on Indomitable, testing interpreted high-grade mineralised structures, highlighted from the recent results including 25m @ 7.5g/t Au from 41m announced at the end of last year.
The CEO says the Alpha Domain is a main focus for many reasons.
Alpha Domain hosts the Lords Camp, Vanguard Camp, and Indomitable Camp. Based on the success of the systematic approach to exploration to date, Alto is reviewing multiple other early greenfield and advanced brownfield targets within the more than 740km-square Sandstone Gold Project. Bowles says this forms part of Alto’s longer term strategy to continue to advance the overall project pipeline to support a standalone operation.
The CEO notes that the company has undertaken a significant amount of work at Sandstone in recent months and with the latest results regarding the total mineral resources, there is a reasonable prospect of the asset eventually being mined.
By taking into account the shallow nature of the deposits, the thickness and gold grades of the deposits, which are located on granted mining or exploration leases, and proximity to existing infrastructure, following the mineral resource update, one could deduce that if any project was primed to be mined it’s this one.
“This mineral resource update is a significant increase in the total mineral resources at the Sandstone Gold Project”
“This mineral resource update is a significant increase in the total mineral resources at the Sandstone Gold Project and was achieved at an average discovery cost of $16/oz. This latest update provides strong encouragement that the company can continue to grow its resource inventory and progress its strategy to develop a stand-alone gold operation.”
During H2 2022, Alto completed 24,000m of drilling at the Indomitable Camp and other regional prospects and continued to receive a significant number of assays from infill, extensional and step-out drilling from the Indomitable Camp. As part of its ongoing regional evaluation of the multiple advanced prospects within Sandstone, a targeted review of both the historic ‘high-grade’ Hacks and Oroya gold mines and near mine area was undertaken, which identified a number of priority targets.
Following the review, the company completed a first pass 2,000m RC drilling program at Oroya to test potential ‘high-grade’ extensions of the Sandstone Reef, below the shallow-mined Oroya open pit and along strike, and down dip of the underground workings of the main reef.
Long-forgotten mines
The CEO adds that the Oroya and Hacks mines were major gold producers, together accounting for almost 40% of the total gold production from the Sandstone Greenstone Belt.
Despite the historical production and numerous old workings over the areas, Bowles adds that there has been limited modern exploration undertaken over these prospects. The lack of modern exploration and numerous historic high-grade drill results provides an ‘exciting’ opportunity for Alto to re-explore these ‘long-forgotten mines’ and fits with the company’s strategy of continuing to focus on growing its existing resource base within the Alpha Domain, while progressing regional prospects.
The Oroya Mine in particular produced 220,000oz @ 16.5g/t Au from underground mining between 1904-1920 and a further 25,000oz @ 2.3g/t Au from open pit mining from 1994 1995 when the gold price was US$384/oz.
The CEO’s view is that there is significant potential to extend the known mineralisation along strike further to the north and north-west. The company considers it likely that there is considerable potential to define additional shallow resources at Oroya based on the remnant high-grade mineralisation, which remains open and based on the current gold price, he adds.
As mentioned, Alto’s focus is the Alpha Domain which hosts the Lords Camp, Vanguard Camp, and Indomitable Camp.
The Indomitable Camp, which is currently defined over a 2km strike length is hosted within the Indomitable/Vanguard/Havilah Trend that forms part of the priority ‘Alpha Domain’ target area. Mineralisation is hosted within a package of mafic-ultramafic rocks, crosscut by interpreted major structures.
Resource and extensional drilling at Indomitable Camp has continued to deliver near-surface ‘high-grade’ gold mineralisation beyond the current resource during the period, including a standout 25m @ 7.5g/t gold from 41m, including 6m @ 22.3g/t gold from 56m (SRC853).
Alto recently updated the mineral resource, which the CEO notes incorporates updates for the Indomitable Camp (including a maiden resource for Indomitable East and Musketeer), an update to Lord Nelson and a maiden MRE for Bull Oak.
The updated MRE were prepared by independent mining industry consultants Snowden Optiro and reported in accordance with the 2012 JORC Code.
Resource growth potential
The updated MRE includes all drilling completed up to the end of November 2022. Resource estimates for Lord Henry, Vanguard, Vanguard North, Havilah Camp, Tiger Moth, Piper, and Ladybird deposits are unchanged from the mineral resources reported in March 2022, September 2018, and June 2019, respectively.
The unconstrained MRE for Sandstone is 23.5Mt @ 1.4g/t Au for 1,046,000oz of contained gold, using a 0.5g/t gold cut-off. Bowles says this is 214,000oz outside the optimised and pit-shell and highlights the potential for additional in-pit resource growth through refinement of optimisation parameters, an improving gold price, and further drilling.
The CEO notes that the Sandstone Gold Project shallow mineral resource continues to grow and open-pit optimisations have been performed by Snowden Optiro on the updated mineral resource using a $2,500 per ounce gold price and at a 0.5g/t gold cut-off. This has resulted in an optimised pit-shell constrained total inferred and indicated MRE totalling 17.6Mt @ 1.5g/t Au for 832,000oz of contained Au.
Bowles says the optimised pit shells are based on mining parameters and operating costs typical for Australian open pit extraction deposits of similar scale and geology.
More than 27% of the total MRE within the optimised pit-shells is in the indicated category, which the CEO says it is reasonably expected that infill and additional confirmatory drilling of the historical areas should allow an upgrade to a higher category.
Alto Metals is a Western Australia-based company focused on the exploration and development of its 100% owned Sandstone Gold Project, located in the East Murchison Mineral Field. The Sandstone Gold Project comprises over 740km-square of granted tenure and covers the vast majority of the Archaean Sandstone Greenstone Belt.
Since acquiring the project, Alto has compiled and reviewed a large legacy database ahead of a series of focused exploration drilling campaigns which have defined a JORC (2012) mineral resources of 1.05Moz gold and numerous drill ready targets using a systematic approach.
Write to Adam Orlando at Mining.com.au
Images: Alto Metals Ltd
